Unions plan general strike to protest 2011 austerity budget

Unions hope to bring Portugal to a halt with a general strike on Wednesday to protest against the government's budget plans for 2011, which include proposals to cut civil servant wages by five percent and introduce a freeze on pensions.

REUTERS - Portuguese unions plan to bring the country to a standstill on Wednesday but even if successful, their one-day general strike is unlikely to sway the Socialist government from an austerity course to overcome a debt crisis.

Protest action in Western Europe's poorest country has been tame during the economic crisis that began in 2008. But Portuguese were angered by the government's 2011 budget plan to cut wages for civil servants by 5 percent and freeze pensions.

"We are being robbed. If we don't do anything we'll be stripped of what we still have. This policy is flawed," said Francisco Fonseca, 50, a teacher in a state-run secondary school in Lisbon, who will take part in the walkout.

Many economists see Portugal as the next likely peripheral euro zone country to need a bailout, after Greece and Ireland, to resolve concerns over its debt burden.

Portugal's budget deficit and debts are much lower than in Ireland and the euro zone's first bailout beneficiary, Greece. But economists doubt whether Ireland's rescue this past weekend would stop markets targeting fellow laggard Portugal, or prevent heavily indebted EU states defaulting in the longer run.

The Portuguese strike, for which no major rallies have been scheduled, will be the first in more than two decades to involve both the country's main umbrella unions, including the UGT group that is normally close to the Socialists.

"The strike is going to be bigger and more symbolically important than usual due to the UGT participation, but in general there's not going to be any impact on the government's decision-making," said Antonio Costa Pinto, a political scientist at the University of Lisbon.

Weaker unions

"Our unions are relatively weak, they have a limited capacity to unleash actions that would force the government to accept their conditions... They don't block refineries and roads here. It's not like in France," Costa Pinto said.

In Greece, another debt-stricken euro zone country, unions have staged repeated strikes this year but turnout at rallies started waning after the summer, as the government pressed ahead with unpopular reforms.

In France, massive strikes failed to prevent the government passing legislation to raise the retirement age.

The Portuguese strike will happen just two days before the final vote in parliament on the budget bill, which is expected to pass after the main opposition party, the centre-right Social Democrats, vowed to allow its passage.

"I don't see how this action can have an impact on the government's plans. The budget deal is done and confirmed," said Pedro Magalhaes, a political analyst.

An approved budget is seen as crucial to soothing investor concerns about Portugal's public finances after borrowing costs spiked this year, raising the spectre of a bailout that could impose further, painful belt-tightening.

The labour action, in which organisers plan to halt public transport, most health services and schools, leaves open the question of whether the private sector will walk out en masse to affect other services like banking as well as industry.

Magalhaes said private company employees may not be able to get to work on the day due to the planned public transport freeze rather than them taking part in the action.

Still, the government says it expects minimum services in all key areas to be maintained on Wednesday.

Magalhaes said it was very unlikely that the two main unions would continue working together and saw little scope for further major strife. "The CGTP will continue with strife, especially in the public sector, but I don't see more big general strikes happening down the road," he said.

In the streets, the mood is hardly more encouraging.

"Maybe it won't reach the level of participation and impact that we'd like, but it is crucial (to strike) because it is one of the few ways we can get heard," said Hugo Pedras, 26-year-old graphic designer in a private printing company.